The Value of Brand Communications During Chapter 11 Bankruptcy

Corporate bankruptcy does not mean a brand will become extinct or that it’s time to halt all marketing and communications. Instead, a Chapter 11 filing is an opportunity for a business to restructure debt and remain in operation. A strategic approach to brand communications leading up to, during, and following a Chapter 11 filing is key to successful emergence.

The United States saw a 26% increase in Chapter 11 business bankruptcy filings, in the first half of 2020, according to legal-services firm Epiq. Many retailers, travel companies, and oil and gas companies were among the over 3,600 companies filing for bankruptcy protection, including Brooks Brothers, Ascena Retail Group (Ann Taylor and Lane Bryant), Hertz, 24 Hour Fitness, and Frontier Communications. In the coming months, there will likely be many more companies that are significantly impacted by the COVID-19 pandemic and changing consumer behavior, filing for bankruptcy protection.

However, Chapter 11 is not all doom and gloom. The objective is often to reorganize the business, not liquidate it entirely. A company going through Chapter 11 typically downsizes its operations. For example, many retailers who’ve announced Chapter 11 filing are closing down select stores and selling off certain brands.

There are many misconceptions about bankruptcy. Therefore, there’s a critical need to reassure a variety of audiences throughout the process. Brand communications play a vital role in sharing important information about the future of a business as it enters, manages through, and emerges from bankruptcy. 

Here are several central pillars to effective brand communications in support of Chapter 11 filings.

Create a communications task force. 

Internal alignment requires close coordination across leadership, legal, sales, marketing, and client-facing teams. Consider engaging outside communications counsel in the form of a specialized PR agency or consultant with relevant experience.

Craft the narrative. 

The brand should own the present and future narrative. Don’t let others tell your story. Communicate new information along the restructuring journey to guide the media, partners, and customers regarding your transformation. 

Find your allies.

Share and back up your story through parties who can support your communications, including analysts, influencers, partners, and ‘friendly’ reporters. Focus on the markets where you have a strong presence because of the vested interest in your future success.

Lean on leadership.

The CEO’s role is to set clear expectations and reassure customers, employees, and the general public. The top executive should focus on transparent and open communications that outline the organization’s future. Leadership can draw on brands who’ve successfully restructured and refocused their business.

Be consistent.

There are typically many audiences who will be following Chapter 11 developments and information. Orchestrate consistent communications that mirror your filing but tailor these themes by the audience.

The Chapter 11 process is not a time to neglect your brand communications and marketing. Rather, it’s an opportunity to provide information reflective of the company’s new direction. 

6 Tips for Brand Communications on a Budget

We are facing a bleak global economic outlook due to the spread of COVID-19. For many brands, recovery will take time. However, an economic downturn is not a reason to halt all brand communications and public relations activities. There are many things that brands can do to raise their visibility with limited investment and strategic allocation of resources.

We are facing a bleak global economic outlook due to the spread of COVID-19. For many brands, recovery will take time. However, an economic downturn is not a reason to halt all brand communications and public relations activities. There are many things that brands can do to raise their visibility with limited investment and strategic allocation of resources.

Take Advantage of Free Content Platforms

If your business is not able to invest in paid advertising or promotional content, there are great platforms to share thought leadership and increase visibility with current and potential followers. Medium and LinkedIn are sites that provide an opportunity to build reach with your audience, as well as the chance for compelling content to become viral.

Find Passionate Writers Within Your Organization

It can be challenging to lean on your most senior executives to serve as subject matter experts for brand communications when these leaders are focused on keeping the business afloat. However, there are typically many other SMEs that are untapped who can be a valuable asset when you’re developing content. Ideally, these folks are looking for professional development and advancement opportunities, and you can increase their visibility in the organization and industry. In all pockets of the companies I’ve worked for, I’ve found former journalists and passionate writers. To identify these individuals, consider an internal poll or leverage LinkedIn and Twitter to see which employees are actively blogging or sharing insightful articles.

Use Social Media to Find and Engage Reporters

There are many PR tools available today that help you identify reporters, contact them, and track stories and coverage. However, if you don’t have thousands of dollars to spend, Twitter is a great free resource. Reporters are very active, and many include their contact information, or you can reach them via direct message. Through reporters’ social media accounts, you can easily see what they cover as well as what interests them on a personal level to help build your relationship with them.

Lean on Corporate Partners, Clients, and Industry Organizations

Your business partners are likely facing similar circumstances and are trying to do more with less. Consider collaborating with like-minded clients, industry organizations, and vendors on communications and PR activities. Together you can make your resources go farther and tap into each other’s reach.

Look for Hungry Consultants

PR agencies carry a hefty price tag and may not be right for your needs or your budget. A consultant can be a cost-effective alternative and a way to get traction quickly. Agree upon goals, the scope of work, and metrics for success to make sure your investment aligns with your strategy.

Revisit Past Successes

Look back on your past brand communications and PR successes. Often there’s an opportunity to update and refresh successful content and PR strategies, especially thought leadership, research, and pitch angles.

Brand communications and PR belong in the marketing mix during economic ups and downs. There are plenty of ways to build and protect your reputation without a hefty investment.